The WTO’s Goods Trade Barometer hit
a record high in its latest reading thanks to strong trade expansion and
recovery from the pandemic.
According to the World Trade Organization (WTO) Goods
Trade Barometer, the current reading of 110.4 is the highest on record since
the indicator was first released in July 2016, and up more than 20 points
year-on-year.
This reflects both the strength of current trade
expansion and the depth of the pandemic-induced shock in 2020. However, while
still well above trend, the index has started to rise at a decreasing rate,
which could presage a peaking of upward momentum in trade.
All of the barometer’s component indices were above
trend in the latest month, illustrating the broad-based nature of the recovery.
Indices for air freight (114.0), container shipping (110.8) and raw materials
(104.7) in particular continued to rise, signalling faster than average trade
growth.
The latest barometer reading is broadly consistent
with the WTO’s most recent trade forecast of 31 March, which foresaw
an 8% increase in the volume of world merchandise trade in 2021 following a
5.3% drop in 2020.
Global goods trade has grown steadily since it
registered a sharp decline in the second quarter of 2020 during the early days
of the pandemic. The volume of merchandise trade was up 5.7% year-on-year in
the first quarter of 2021, the largest jump since the 5.8% rise in third
quarter of 2011. The latest barometer reading suggests that goods trade will
see an even larger year-on-year increase in the second quarter once trade
volume data for that period are available.
The outlook for world trade continues to be
overshadowed by downside risks, including regional disparities, continued
weakness in services trade, and lagging vaccination timetables, particularly in
poor countries. Covid-19 continues to pose the greatest threat to the outlook
for trade, as new waves of infection could easily undermine the recovery.
By Just Style